Shares in San Franciscan biotech Nektar Therapeutics (Nasdaq: NKTR) fell in pre-market trading after German pharma major and co-developer Bayer (BAYN: DE) announced negative results from the Phase III INHALE trial.

The companies signed a deal in 2007 to develop candidates for gram-negative pneumonia, making use of Nektar’s proprietary pulmonary technology to deliver specially-formulated therapies.

That deal led to a global Phase III program investigating Amikacin Inhale, also known as BAY 41-6551, an investigational integrated drug-device combination product, for the treatment of intubated and mechanically ventilated patients with gram-negative pneumonia.

Bayer announced that the trial did not meet its primary endpoint nor any secondary endpoints, failing to demonstrate superiority versus standard of care plus aerosolized placebo.

The company says that efficacy and safety analyses from this study will be published in due course.

Vice president of medical affairs Aleksandra Vlajnic said: “New treatment options are needed for difficult-to-treat gram-negative pneumonia in intubated and mechanically ventilated patients in the intensive care unit setting, as morbidity and mortality remain significant in these patients.”

In the USA, it’s estimated that pneumonia is responsible for more than a tenth of all hospital stays, accounting for $212 billion in annual spending, or around $15,000 per hospitalization.